Beggars can’t be choosers, and George Osborne – under attack on virtually all
sides – must gladly seize on whatever support he can find.

Yet even for Britain’s beleaguered Chancellor, to be blessed by Olli Rehn, European Economic and Monetary Affairs Commissioner, must feel a bit like the kiss of death.

A mild mannered and basically decent Finn who has never looked comfortable in his role as Europe’s economic slave driver in chief, Mr Rehn is admittedly only a spokesman for policies he surely cannot believe in.

There is, however, no quarrelling with the results – they have been utterly disastrous, helping to induce socially destructive levels of unemployment and economic contraction in large parts of Europe, and now open political insurrection in Italy. Praise from Mr Rehn – according to the economics commissioner, Britain is to be congratulated on its fiscal austerity – must therefore be seen as a form of petrification. Europe is steadily freezing over under his gaze.

Superficially, there are of course lots of similarities between what Mr Osborne is trying to do here in the UK and what Europe is imposing on its troublesome periphery. Virtually all advanced economies with big budget deficits are now engaged in varying degrees of fiscal consolidation.

Yet there are also key differences which set the British version of austerity, such as it is, apart from the sort of self-defeating fiscal consolidation we are seeing in the eurozone. This is now unambiguously apparent in the data. Revisions to UK GDP published on Wednesday show that last year the UK economy grew 0.3pc, and actually quite a bit more if you ignore disruptions to production of North Sea oil. It now appears that onshore Britain never had a double-dip recession. Unemployment is also falling, with substantial private sector job creation.

The eurozone, meanwhile, contracted by 0.6pc last year, and by considerably more in the nations with deficit challenges similar to those of Britain. The European Commission forecasts a further 0.3pc contraction this year, against 0.9pc growth in the UK. Nobody is pretending the British economy is a bed of roses, but relative to those with similar fiscal challenges, things aren’t really that bad. What are the reasons for this?

One is that the timetable of fiscal consolidation isn’t proceeding nearly as fast in the UK as it is in the eurozone periphery, and indeed has already been twice extended by Mr Osborne to take account of slower growth.

In Britain, we are said to be a quarter of the way into the deficit reduction programme, yet you wouldn’t know this from the support the economy is continuing to get from relatively strong growth in government consumption, which in real terms was up 2.9pc year on year in the final quarter of last year.

OECD analysis suggests that in the four years to 2014, UK fiscal consolidation will have amounted to “only” 4pc of GDP. This compares with 16pc in Greece, 12pc in Portugal and 10pc in Spain and Ireland. Osborne talks tough on the deficit, but in reality he’s just a wussy compared with the masochists of Europe.

For those who take the debate on fiscal multipliers seriously, this is a crucial distinction, for according to analysis by the International Monetary Fund there may be an optimal level of consolidation beyond which it can be quite counter-productive to stray.

This level is around one percentage point of GDP a year, which is roughly where the UK sits. Much higher than this and it becomes self-defeating, in that the task of fiscal consolidation is further steepened by the contraction in the economy it is likely to induce. Governments end up chasing their tails, with spending cuts weakening the economy to a degree where it becomes necessary to make still further cuts just to stay in the same place fiscally.

The other main difference is that unlike the eurozone periphery, forced to borrow in what is in effect a foreign currency that dances to the tune of German monetary demands, Britain still has its own currency and central bank.

This allows the UK to counteract fiscal consolidation with ultra-loose monetary policy, and most crucially of all, it allows the UK government to continue borrowing at extraordinarily low interest rates. Britain has therefore remained largely immune to the mutually reinforcing combination of rising sovereign yields and failing banks we have seen sweep the eurozone periphery.

In a recent paper, Paul de Grawe, of the London School of Economics, and Yuemei Ji of the University of Leuven, convincingly argue that excessive eurozone austerity is an entirely unnecessary panic reaction to widening sovereign debt spreads, which are in themselves a direct consequence of deficient European monetary policy.

German abhorrence of anything that looks like monetary financing of governments has prevented the European Central Bank from engaging in the sovereign bond buying, or quantitative easing, we have seen in Britain, the US and Japan.

It was only after the euro came to the very brink of collapse that the ECB was persuaded to start playing its proper role as a lender of last resort, first by buttressing the banking system with its LTRO programme, and later the sovereign debt market by promising to buy government bonds without limit.

Yet in order to assuage German concerns, this latter promise has been made conditional on governments agreeing a strict reform agenda, including punishing targets for fiscal consolidation. At the weekend, Italy voted decisively against such conditions, threatening renewed financial mayhem.

All this leads to two conclusions – one familiar and the other quite surprising. The familiar conclusion is that by imposing policies they think essential to keep the euro on the road, Europe’s political elites are only further undermining it. People can see that austerity isn’t working and are already, in their droves, voting against it. If this carries on, they’ll eventually seek liberation from the euro’s shackles.

As far as I can tell, Beppe Grillo is a comparatively harmless protest politician and, like all good comedians, he seems to talk a great deal of common sense. Unfortunately, there are much worse populists than him waiting in the wings. Far from reinforcing Europe’s golden age of post-war stability, the single currency seems only to be tearing it apart.

The more surprising conclusion is that despite the strictures from both right and left, the Coalition has got the broad outline of fiscal consolidation more or less spot on. The composition could be better, but the macro-economics are about right.

None of this is to argue the eurozone periphery doesn’t have a serious competitiveness problem . But for reform and austerity to command public support, it must be self imposed and democratically accountable, and it must proceed at a pace compatible with social and political stability. All these things are missing in what the eurozone is attempting to do.